Lead story
‘Nothing short of disgraceful’ – international downgrade threat sparks outrage across Australian industry
Trevor Marshallsea
ANZ News
The peak breeding body in the industry's heartland of NSW has called on the Racing NSW (RNSW) board to “stand down” amidst concerns that Australia could be demoted from Part I of the international Blue Book.
Thoroughbred Breeders NSW president Hamish Esplin made the call as Australia’s black type situation - a suite of NSW races given domestic upgrades that the Asian Racing Federation (ARF) has not recognised under the international pattern - continues to be at an impasse.
A RNSW spokesman dismissed Esplin’s call.
It comes as the ARF has also stated races including Randwick’s Sydney Cup (Gr 1, 3200m) and The Metropolitan (Gr 1, 2400m), and Perth’s Railway Stakes (Gr 1, 1600m) were eligible to be downgraded, based on ratings data.
And it said Australia’s oldest feature - the VRC Derby (Gr 1, 2500m) - should be subject to a warning of a potential downgrade, along with fellow top-tier events in the Queensland Derby (2400m), the SAJC Australasian Oaks (2000m) and WATC Winterbottom Stakes (1200m).
The ARF has made very clear in a letter to Racing Australia (RA), seen by ANZ News, that the idea of the country being demoted to Part II of the Blue Book if it doesn’t institute an approved system of black type governance - once considered fanciful by many - is a real possibility if its concerns are not addressed.
Such a scenario would put Australia on a par with jurisdictions such as Malaysia, India, Panama and Puerto Rico in that all its black type races would be recognised globally as merely “Listed”.
Among many ramifications, industry stakeholders fear this would weaken the value of Australian stock as foreign investors lose confidence in Australian racing, while also dissuading northern hemisphere stud farms from shuttling stallions to the country.
A further possibility is that the ARF’s Asian Pattern Committee (APC) could begin making decisions by itself on Australian black type status, with RA’s representatives not allowed to vote.
While the ARF's formal letter was directed at Racing Australia as the national governing body for black type, Racing NSW’s unilateral upgrades have become the most visible flashpoint in the wider governance dispute.
It comes after an initial batch of 17 NSW races - which later grew to 18 - were listed as upgraded to as high as Group 2 by RA and RNSW, despite the fact there has not been a "properly functioning black-type quality control system in Australia for many years", according to the ARF letter.
Most of those races have now been run twice while advertised under their NSW upgrades, despite the ARF’s Asian Pattern Committee (APC) not recognising the status changes of at least the first 17 under its ground rules. This non-recognition is due to the absence of an Australian black type committee which complies with the APC’s ground rules.
Arion - the southern hemisphere’s largest supplier of pedigree information - has followed the Blue Book in not recognising the upgrades, and they are therefore not reflected in Australasian sales catalogues.
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But - aside from perhaps disappointing connections who may have hoped for sales catalogue value-boosts for any winners or placegetters of the 18 races and their relatives - the current state of confusion in Australia was evident at a recent high-profile overseas auction, where a filly carried a black type update in error since her half-brother ran third in one of the NSW 18.
The ARF has called on RA to put its house in order over the black type situation.
In a six-page letter to RA dated October 16, the Federation reported its executive council, at its meeting in Paris on October 3, discussed its “long-standing concerns” about “quality control for black-type races in Australia”.
It said the APC “recommended that it not consider applications from Australia, nor recognise changes in race status of which Racing Australia gives notice” until RA adopted two measures.
The first is to institute new black type guidelines “in a form compliant with the APC Ground Rules”. The second is that a “national pattern committee, or equivalent body overseeing black type quality control, is operational”.
In October last year, RA announced it had implemented a new system, saying “the Australian Pattern has been reviewed to form the new ‘Australian Black Type Guidelines’”.
Based mainly on race ratings, it would replace the black type pattern committee system which had been in place since the late 1970s, taking “a modern approach” to Australia’s unique racing environment, whilst also recognising, under the country’s federated system of states, any “potential implications from an Australian competition law perspective”.
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Opponents said the new system lacked the discretionary powers fundamental to black type committees around the world. Some also said if the old black type committee had contravened competition laws, the Australian Competition and Consumer Commission (ACCC) would have taken action against it previously.
In any event, the “Black Type Guidelines” have not met the approval of the ARF’s executive council.
In its letter to RA, it said its executive council felt “there has not been a properly functioning black type quality control system in Australia for many years, possibly since as far back as 2017/18. This has presented a raft of issues for the ARF to deal with in that period”.
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It said the executive council’s concerns were three-fold:
that RA’s “black type guidelines unacceptably depart from the APC Ground Rules”.
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that quality control of Australian black type races “is not overseen by an appropriate body”.
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and (concerns over) “the failure of Australian races to have been suitably upgraded and downgraded in recent years”.
The letter said the ARF and APC had, in June and July this year, undertaken “extensive work to assist RA to develop revised guidelines” which would comply with both APC ground rules and Australian competition law.
RA had in July provided the ARF with revised guidelines and draft charters for a “Black Type Development Committee”, a “Black Type Advisory Group”, and the “Australian Classification Committee”, the letter said.
However, the executive council said it understood that the gridlocked RA “has not approved the 2025 Guidelines, such that those which remain in force are the 2024 Guidelines”, which contained “significant deficiencies”.
The letter added that “related to the deficiencies in the 2024 Guidelines is the absence of a body which satisfactorily oversees black type quality control in Australia”.
“The ARF and RA have engaged in significant discussion and correspondence about this issue,” the letter said.
Addressing Australia’s “failure to re-grade races”, the letter said it appeared to the ARF, based on race ratings data, that “numerous” Australian races did not currently carry appropriate black type status.
It said the last Australian race downgrade had occurred in August 2012, since which time there had been 79 races upgraded, including seven to Group 1.
“If Australian black type races do not meet the parameters specified by the APC Ground Rules, they should be subject to warning letters and downgrades …” the letter said.
It said based on the information provided by RA, “we consider the following seven races would be eligible for downgrade”, having failed to satisfy the APC ground rules:
Group 1: ATC Sydney Cup, ATC The Metropolitan, the WATC Railway Stakes.
Group 2: Adelaide Cup, WATC Derby, MRC Herbert Power Stakes
Group 3: Launceston Cup
The ARF added a further ten races “should be subject to warning letters” about potential downgrades - including the Group 1 Victoria Derby, Queensland Derby, Australasian Oaks and WATC Winterbottom Stakes.
That list also included the Group 2 Brisbane Cup, and Caulfield’s Autumn Classic.
Under “potential actions”, the ARF gave RA until November 14 to “finalise and approve guidelines” which addressed its concerns; establish any necessary bodies to “give effect to the guidelines approved”; issue warning letters and; “commit to downgrading races, as necessary, where they do not meet relevant parameters”.
It is not clear whether the ARF did receive a written response from RA by the November 14 deadline, though one source said RA might have asked for an extension. ANZ’s call to RA CEO Paul Eriksson seeking clarity on this matter received no response.
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The letter said that “failing satisfaction”, the APC may move to “restore effective black type quality control for Australian races” by not considering any of RA’s applications on gradings, and may begin making decisions on Australian Group status itself.
It said those decisions would “require the approval of the majority of the APC, with RA not being permitted to vote”.
The ARF noted the APC’s ground rules stated decisions relating to status below Group 1 were made by national bodies - except in “exceptional circumstances”. However, it said it considered its list of grievances to “constitute the requisite exceptional circumstances”.
Most worryingly for the Australian industry, the letter, signed off by ARF’s Hong Kong-based secretary-general Andrew Harding, concluded:
“RA may be required to show cause as to why the APC should not recommend to the IRPAC, that it endorse, and the Society of International Thoroughbred Auctioneers, that it ratify, that Australia be demoted from Part I of the Blue Book until such time as it has in place a black type system which addresses the concerns set out above.
“The ARF recognises that the demotion of Australia from Part I of the Blue Book would have very significant consequences not only for RA, but the entire racing and breeding industry in Australia, the ARF region and potentially beyond.”
Esplin said considering the ARF’s letter and the threat to demote Australia to Part II of the Blue Book, the country’s racing administrators had “placed the Australian breeding industry in its most fraught position in its more than 150-year history”.
Amid fears of the impact of a loss of confidence globally in the Australian breeding industry, Esplin told ANZ: “It is nothing short of disgraceful that the administrators of racing in this country have put the breeding industry across Australia, the livelihoods of everyone involved in a breeding farm, and the value of all Australian bloodstock in serious jeopardy.”
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He added: “At no time since that letter was received by RA has Racing NSW informed me, on behalf of the breeders of NSW, either through official channels such as the Racing Industry Consultation Group, or informal means, that RA had to reply to that letter from the APC before November 14 assuaging their concerns about the future of the pattern in this country.
“I learnt of it like most things in this industry, from other people and by reading the media.”
Esplin turned his focus to NSW, the state with the upgraded races that are among the ARF’s concerns.
"From our viewpoint, we have not seen that Racing NSW wants to engage meaningfully with us. We have not seen that it considers the views of its stakeholders. For those reasons, we call for the board to stand down,” said Esplin.
“The horse industry, and especially the breeding industry, like many other industries, relies largely on confidence; confidence that there will be buyers for your yearling, confidence that those who host races can do it competently.
“Confidence that in the continued globalisation of the industry, the involvement of foreign countries as investors in our country will continue.
“The board of TBNSW and the significant number of stakeholders I’ve spoken to in recent weeks, have suddenly, because of the actions of RNSW and RA, lost that confidence
“The board of TBNSW and the significant number of stakeholders I’ve spoken to in recent weeks, have suddenly, because of the actions of RNSW and RA, lost that confidence.”
In a statement, an RNSW spokesperson rejected Esplin’s comments.
“It is a ridiculous call to ask the Board of the most successful jurisdiction in Australia, with daylight second, to resign,” the spokesperson said.
“It shows you exactly why you need a strong body such as Racing NSW to represent the interests of the industry as a whole and not just vested and selfish self-interest groups.
“This stunt unfortunately makes his organisation look uncredible as they are driven by agendas rather than the good of the industry.
“When all the correct facts come out and not selective reporting, Mr Esplin is going to look even sillier.”
One prominent breeder said finding a resolution to the current black type impasse - and thus fortifying the economic strength of the Australian industry - was of critical importance, not just to Australia but to the thoroughbred industry in the northern hemisphere.
“This is of importance to the northern hemisphere,” said the breeder, who spoke on condition of anonymity.
“Australia is the most important jurisdiction for breeding in the southern hemisphere.
“We buy more mares from the northern hemisphere than anyone else. We’re the ones buying at Tattersalls, Arqana, Goffs, Keeneland.
“We’re shuttling all the northern hemisphere stallions, and we’re buying 750 tried horses from the northern hemisphere at a high level each year.
“So, we’re much more important economically to the northern hemisphere than, say, Hong Kong, which doesn’t breed horses.
“Because of that interdependence, anything that happens in the pattern in Australia has a huge impact internationally. So if you impact the pattern in Australia, you impact the pattern internationally, and that’s what administrators in the northern hemisphere need to realise. And they do realise it, and so they’re very concerned about the impasse that’s occurred here.”
In a further statement issued last Friday, Racing NSW said: “Racing NSW wishes to correct the record in respect of the widespread misinformation surrounding the status of Black Type Guidelines and the Pattern in Australia.
“Racing NSW strongly supports the implementation of the Asian Pattern Committee endorsed Black Type Guidelines and the creation of an Independent Black Type Advisory Group (BTAG) to ensure expert, impartial oversight of all key aspects of the Pattern and to safeguard the integrity, fairness and credibility of Australia’s black type system.”
It added: "The current situation is not the result of any action taken by Racing NSW. Instead it stems from Racing Australia's decision not to approve the internationally endorsed revisions.”
RA is the peak national body for racing in Australia, with responsibilities including regulating the Australian breeding and racing industry by administering the Australian Rules of Racing and the Rules of the Australian Stud book.
Its board of directors is composed of representatives from the Principal Racing Authority of each of the five major states, with one representative for the smaller jurisdictions of Tasmania, the ACT and the Northern Territory combined.
NSW and Victoria have the power of veto on decisions taken by RA.
RNSW, which sends a nominated director to sit on the RA board, is the regulating body for thoroughbred racing in NSW.
Its mission statement on its website says its role is: “To provide independent, strong and united leadership in the development and enhancement of the NSW Thoroughbred Racing Industry, which will lead to the maintenance of confidence in the integrity of the industry, improvement in its competitive position and increased financial returns to constituent stakeholders.”
RNSW’s website details a list of six of its functions including “to control, supervise and regulate horse racing in the State”, to enact policies conducive to the promotion, development and welfare of the racing industry in the state, and “functions with respect to the insuring of participants in the horse racing industry”.
One source with intimate knowledge of the subject said “many people” across the industry hoped cool heads would prevail and the doomsday crisis would be averted.
“When push comes to shove, they’re all big boys. Everyone might have a different view on the broader themes, but I think people just want to have the pattern mess sorted out,” the source said.
